A CellRight Technologies product was used to help repair the abdominal walls of conjoined twin sisters Scarlett, left, and Ximena Hernandez-Torres following their separation surgery last year at Driscoll Children’s Hospital in Corpus Christi, Xconomy reported. Universal City-based CellRight was acquired by U.K.-based Tissue Regenix Group in a deal reportedly worth $30 million.

Photo: (Joshua Thelin /Driscoll Children's Hospital via AP)

CellRight Technologies, a Universal City maker of bone and tissue grafts derived from human cadavers, has been in talks to be acquired by a publicly traded regenerative medical devices company based in the United Kingdom.

Tissue Regenix Group’s pending deal for the privately held CellRight became public last month when a local CellRight shareholder sued to halt the deal alleging its founder had a conflict of interest.

The litigation was quickly resolved and discussions on a sale continue, according to a recent announcement from Tissue Regenix.

Calls to CellRight Chairman and CEO Jesus Hernandez, his lawyer Laura O’Donnell and company lawyer Jeffrey Webb were not immediately returned on Friday.

Caitlin Pearson, a Tissue Regenix spokeswoman, said in an email she could not make any additional comments about the proposed transaction.

Tissue Regenix already has a local presence. It established its Tissue Regenix Wound Care Inc. subsidiary in San Antonio in 2012 to bring to the U.S. its DermaPure product — used in the treatment of chronic and acute wounds.

San Francisco-based market research and consulting company Grand View Research listed Tissue Regenix as among the key players in the tissue engineering market in a report last year. San Antonio-based Acelity LP Inc. also made the list, but that was before it sold its regenerative medicine company LifeCell Corp. to pharmaceutical giant Allergan for $2.9 billion. LifeCell uses technology to help the body restore or replace damaged cells and tissues.

CellRight was founded in 2012 and first developed a scaffold product for repairing bones, according to Xconomy, which reports on business, life sciences and technology news.

CellRight has a method of processing human bone — which comes from donated cadavers — so that it can be sterilized without it losing a type of protein thought to help in bone grafting, Xconomy reported last year.

Hernandez told Xconomy that if the scaffold is mixed with a patient’s stem cells, done by either soaking it in a patient’s blood or by removing cells from bone marrow, the proteins will help stimulate the cells, spurring bone growth.

Xconomy also noted how another CellRight product was used last year during a surgery to separate conjoined twins (who were from a set of triplets) to help repair their abdominal walls. The product is derived from human skin, which is put through a proprietary sterilization process called BioRinse.

CellRight was formed with the intention of eventually finding a buyer, according to a lawsuit filed last month by shareholder HugoCellR, a San Antonio partnership led by Hugo A. Gutierrez Jr. He serves on the board of Falcon International Bank, an institution with more than $1.1 billion in assets that his family owns. Falcon has two branches in San Antonio, according to the bank’s website.

HugoCellR alleged in its lawsuit that CellRight was only offered for sale to one buyer — Tissue Regenix — instead of being advertised to multiple prospective buyers. The suit was filed in Bexar County district court.

HugoCellR accused Hernandez of “acting primarily in his own self interest.” If the deal closed, the suit said, Hernandez would receive substantial pay, profits, stock options and other consideration that other shareholders would not receive.

“Hernandez is pursuing the sale to Tissue Regenix as the best course for his own professional prestige and personal lifestyle, which are unrelated to the fair market value of the company,” the suit said. “Thus, Hernandez is personally and financially interested in both sides of the deal.”

State District Judge Cathleen Stryker issued a temporary restraining order halting any sale of CellRight on May 19. But less than two weeks after the suit was filed, the parties informed the court they had reached a settlement.

No details of the settlement were disclosed but HugoCellR now supports the sale.

“Our client is on board with the deal, given the additional terms that were involved in the settlement,” said Lamont Jefferson, a San Antonio attorney representing HugoCellR. “We’re waiting for the deal to happen, but we’re not in control of whether it happens.

“If the deal goes through and we get what we were promised as a part of the settlement of the lawsuit, then our client will be happy,” Jefferson added.

According to the lawsuit, the latest version of the Tissue Regenix purchase agreement must be closed by June 30.

Tissue Regenix reports its financial results in British pounds. Based on a current conversion rate, the company lost about $12.7 million on more than $1.8 million in revenue in the 11 months ended Dec. 31. That compares with a $12.1 million loss on about $1 million in revenue in the 12 months ended Jan. 31, 2016. The company has changed its reporting period.